New orders for long-lasting U.S. manufactured goods unexpectedly fell for a second straight month in June, posting their largest decline since August, further evidence economic growth cooled in the second quarter.
The Commerce Department said on Wednesday durable goods orders fell 1.0% after a revised 0.8% drop in May.
Analysts polled by Reuters had forecast orders increasing 1.0 percent in June from May's previously reported 0.6% fall.
U.S. stock index futures turned negative on the data, while Treasury debt prices rose. The U.S. dollar extended losses versus the yen.
Data ranging from consumer spending to manufacturing have suggested the recovery from the longest and deepest recession since the 1930s took a step back in the past few months.
The government is expected to report on Friday that growth slowed to a 2.5% annual rate in the April-June period from a 2.7% pace in the first three months of the year, according to a Reuters survey.
Durable goods orders had been expected to rise based on the fact that Boeing Co received 49 orders for civilian aircraft in June compared to only five in May.
But non-defense aircraft orders tumbled 25.6% in June after falling 30.2% the prior month. Overall orders were also pulled down by bookings for computers and electronic products, which saw their largest decline since October.
Orders for machinery recorded their biggest decline in 14 months, while those for primary metals fell by the most since March 2009.
Durable goods orders are a leading indicator of manufacturing, which in turn provides a good measure for overall business health.
Manufacturing is leading the economy's recovery from the most brutal downturn since the 1930s as businesses replenish inventories drawn down to record lows during the recession, but has shown some signs of exhaustion in recent months.
New durable goods orders excluding transportation fell 0.6% last month after increasing 1.2% in May. Analysts polled by Reuters had forecast new orders excluding transportation gaining 0.3% from a previously reported 1.6% increase.
In a positive sign, non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, rose 0.6% in June after increasing an upwardly revised 4.6% the previous month. Markets had expected a flat reading.
Durable goods inventories rose 0.9%, increasing for the sixth straight month. Shipments, which go into the calculation of gross domestic product, fell 0.3% in June after sliding 0.7% in May.
Unfilled orders were flat after increasing 0.3% in May.
Separately, demand for loans to buy homes rose for the second straight week to the highest level since the end of June, but hovered just above 13-year lows, the Mortgage Bankers Association said.
Home purchase loan demand increased 2% last week, but rising mortgage rates saw applications for refinancing falling 5.9%.
